The S&P 500 index has significantly outperformed Ford since July 2016.
This automotive stock might be a compelling choice for dividend investors.
Ford Motor Company (NYSE: F) has been on a tear recently. Shares of the Detroit auto giant have soared 28% over the past 12 months (as of July 21), outperforming the S&P 500 index.
Investors might want to view this as an anomaly, though. The long-term trend is less encouraging.
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If you'd invested $10,000 in this automotive stock 10 years ago, here's how much you'd have today.
Image source: The Motley Fool.
Over the past decade, Ford shares have produced a total return, which includes dividend reinvestment, of 72%. This means that a $10,000 initial capital investment would be worth just over $17,200 today.
Compared to the popular benchmark, this is a disappointing outcome. The S&P 500 index's total return of 305% is more than 4 times larger.
Looking ahead, I think the chances are very slim that Ford can beat the market in the coming decade.
That's because Ford is a capital-intensive, low-growth, and low-profit business. The nature of its operations isn't going to change. This doesn't support outsize share-price gains.
However, income investors might be compelled to own the stock. With a hefty dividend yield of 4.2%, the company can provide certain market participants with a steady stream of payouts if that's what they're looking for.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.